The interest of the repurchase of credits for a borrower is to be able to profit from the reduction of his monthly payments. This means that instead of paying several deadlines each month to several credit organizations, the operation will allow him to have only one contact with a single monthly payment. A new loan agreement as well as a new repayment term will be put in place during the financial package. The latter is determined according to several criteria, including the household’s ability to repay, and therefore its income, but also the amount of debt and the risks taken in relation to the financing of the repurchase transaction. The 15-year, 180-month period is ideal for some borrowers, but it will require a thorough analysis of the situation.
The principle of redemption of credits
The purpose of the redemption of credits is to raise several loans, which may be consumer loans as well as real estate loans. The financial institution that supports the financing operation may be a bank or an organization specializing in credit redemption. It is he who will pay off all outstanding credits by repaying all remaining capital due and will propose a new credit unique to the borrower. The latter will be able to choose a new repayment term as well as a lower monthly payment. These parameters will depend on the household’s debt ratio, but also on its repayment capacity, according to its monthly resources. The shorter the duration, the greater the amount of the monthly payment, and vice versa the longer the duration, the lower the monthly payment. Good to know: in the latter case, the total cost of credit is higher.
It should also be known that the purchase of credits makes it possible to borrow an additional amount of money that can be used to finance a new project or even personal debts. It will be an amount allocated to a purchase or service. This solution makes it possible to avoid subscribing in parallel to a new loan, but it should be known that this action can influence the repayment period. Indeed, it can be lengthened because the amount borrowed is more important.
Characteristics of the 15-year credit redemption
The repurchase of credits over 15 years, ie a total period of 180 months, is not reserved exclusively for mortgages. Indeed, some lending institutions grant a loan consolidation over a period of 15 years for consumer credit. All conso credits will be included in this transaction, as well as personal loans which are conso vested loans without supporting documents and revolving credits. To these may be added some debts such as rent or tax delays, unpaid bills or personal debts, or even bank overdrafts. In addition, when they do not exceed 60% of the amount borrowed, home loans may also be included in the 15-year credit buyback plan.
The 15-year credit redemption is available to any borrower from the age of 18 up to age 75 and over depending on the funding organization. The borrower has the possibility or not to subscribe to a borrower insurance to cover himself in case of problem or life risk (divorce, death, loss of employment, accident, etc.). The operation generates file fees that can be included in the financing plan. The borrower has the option to choose the fixed monthly date on which his monthly payment will be taken from his bank account.
Subscribe to a 15-year credit redemption
The grouping of credits is an interesting alternative for the one whose monthly payments of the different credits are too heavy for its budget. It will be able to readjust the monthly sum intended for the repayment of its debts and loans, while choosing the optimal duration. The redemption of credits can be subscribed in the short, long or medium term, everything will depend on its category. In general, the purchase of conso credits can be subscribed for a period ranging from 12 months to 12 years maximum, while the repurchase of mortgage can reach 35 years maximum. These operations are each governed by their own legislation, but in reality the rules are set directly by each credit institution. These are based on their own criteria, it may be the profi le of the borrower, his income and his professional and rental situation for example.
Choosing a shorter repayment period also provides a more attractive interest rate. This is simply because banks take less risk over a shorter period, with a borrower wanting to pay off more quickly. As a result, the conditions of granting are generally more flexible, because the future borrower has a major asset. At the level of documents and supporting documents requested, they are identical, regardless of the chosen repayment period.
The rules for granting 15-year credit redemption have changed in recent years. If before, it was mandatory to have a mortgage guarantee for any operation whose duration exceeded 12 years, this is no longer the case today. Indeed, it is now quite possible to find a credit buy-back organization that does not require a real estate guarantee to provide 15-year funding. On the other hand, it is true that this practice still has its limits and is reserved for a certain category of borrowers. Tenants, for example, do not have access to the purchase of 15-year credits and the transaction will be limited to 12 years of maximum repayment. Owners or first-time home buyers whose debt restructuring is open for this period must, however, live in metropolitan France and be employed or retired. The amount borrowed will of course be a decisive element. Again, there is a difference between the amount of money given to a tenant and a landlord. The first will be able to borrow only 100,000 euros maximum, while the second will be able to go up to 200,000 euros of loan.
The benefits of a 15-year credit redemption
Subscribing to a 15-year mortgage-backed loan buy-back not only allows for simplified implementation of the transaction, but also makes the funds available more quickly. While it is true that interest rates are higher for a loan buy-back than for a mortgage, the borrower will be able to take advantage of low interest rates, with an average of 4% in October 2018., notary fees, guarantee and mortgage are in this case nonexistent.
The purchase of credits over a period of 15 years with additional cash also makes it possible to make a reserve of money either for a purchase, for a hobby, or simply for a security in case of unforeseen. Another advantage is that the household debt ratio decreases with this duration, which means that the door is open to new horizons, either savings or financing in particular. Note that the 15-year loan consolidation can also include only consumer loans and household debt, without affecting the current home loan.